Days after the US government announced unprecedented criminal and civil charges against four cryptocurrency companies for market manipulation and “wash trading,” meme coin projects dependent on those same firms have begun trying to distance themselves from the fallout.
In particular, token development teams that had partnered with one of the companies involved, market maker Gotbit, began issuing statements strongly disassociating themselves from the firm they relied on for liquidity.
“We have terminated our relationship with Gotbit, who were our market maker partners,” the Ethereum meme coin project Neiro tweeted Friday. “None of the issues related to Gotbit or its employees concern or relate to Neiro in any capacity.”
Members of the crypto community weren’t as quick to embrace Neiro’s assurances. For example, anonymous on-chain sleuth ZachXBT soon after sharply criticized Neiro for partnering with Gotbit prior to this week’s allegations, despite concerns about the market maker having been publicly known for over a year.
Other meme coin projects on Friday abruptly announced their unwillingness to collaborate with Gotbit any longer, even though the self-proclaimed hedge fund and meme coin market maker still exerted significant control over their tokens.
“Unfortunately, Gotbit still holds the majority of our holdings, including marketing, treasury, and team tokens, and they are currently unwilling to return them,” the BMS team behind the Tron meme coin acknowledged in a post intended to announce it was cutting ties with the company.
Even meme coins, which claim to have stopped working with Gotbit before this week, have stressed their condemnation of the company's alleged behavior.
The US Department of Justice (DOJ) accused Gotbit of conducting illegal wash trades in digital tokens to artificially inflate the price of the tokens before selling the tokens in alleged “pump and dump” schemes. The US Securities and Exchange Commission (SEC) also accused Gotbit of providing “on-demand market manipulation” by “generating fake daily trading volume, often in the millions of dollars, essentially trading crypto assets with itself.”
These allegations likely surprised very few. Back in 2019, Gotbit co-founder Alexey Andryunin openly detailed his company’s business model to CoinDesk: manipulating crypto markets for a fee to boost the perceived legitimacy of obscure tokens.
“This business is not entirely ethical,” Andryunin said at the time.
$NEIRO $HMSTR $DOGS #gotbit #bms #Beer #memcoins
